Knowledge Hub

In the United Arab Emirates, there are three common phases to obtaining a license in UAE.

1. Name Selection – you are required to select a name for your company to read more about the name https://inchub.com/how-to-select-a-company-name/
2. Initial approval occurs when an individual or a firm submits an application for approval of the business’s operations.
3. Registration & Visa: Once the registrar has given their approval for the submitted documents and business plan, a trade license will be granted. This process can also be referred to as the completion of the incorporation process, assuming that all the necessary third-party government approvals are been taken care, & following which the residence visa for the shareholder/authorized signatory, have been obtained.
4. Bank Account & Business Commencement: Obtaining a business bank account marks the final stage of the entire process. Once this step is completed, you are free to initiate invoicing and handle the sending and receiving of funds as and when required.

A UBO is an individual who owns or controls the entity in the long run, or on whose behalf a transaction or activity occurs.

A UBO is any individual who:

1. owns or controls 25% or more of the company’s shares or voting rights;
2. ultimately owns or controls 25% or more of the company’s shares or voting rights, whether directly or indirectly;
3. has the right to appoint or remove a majority of the board of directors, whether directly or indirectly;
4. has the right to exercise, or actually exercises, significant influence or control over the corporate body;
5. has the right to exercise, or actually exercises, significant influence or control over the corporate
6. is in charge of the corporate entity.
7. If a nominee has shares or rights, the UBO is the person for whom the candidate is acting. If the nominee is operating on behalf of a legal entity, the UBO will be the person who exercises control over that entity.
8. absolute authority over the legal entity
9. In the case of a partnership, a UBO is defined as any individual who owns 25% or more of the partnership’s capital or who is eventually entitled to own 25% or more of the partnership’s voting rights.

A UBO for a trust consists of the settlor, trustees, beneficiaries, and anybody who has power over the trust.

The following are some of the noteworthy advantages of onshore businesses

• Operating expenses are better regulated and minimized, and the company’s strategic imperatives are more focused.
• A better deployment of the company’s internal resources results in higher value.
• It is possible to have a better grasp of internal resources and key capabilities.
• With this global perspective, world-class skills and capabilities may be accessible, as well as a comprehensive understanding of internal resource limitations.
• Difficult difficulties and complexity are more effectively addressed.
• An onshore company offers the best circumstances for effectively running a business both in and outside of the nation; business transformation activities are hastened to optimize the business process; and residency visas are simpler to get because of an onshore firm.

Despite the fact that all offshore firms are unique in their nature and are governed by the corporate laws of their respective countries, they all have the following characteristics:

They are not subject to taxation in their home country, but that does not imply they are tax-free elsewhere. Regulation of business operations is more stringent in developed countries, whereas it is less stringent in developing countries.

• AE Corporate Tax applies to juridical persons incorporated in the UAE and to foreign juridical persons that are effectively managed and controlled in the UAE
• Natural persons will be subject to Corporate Tax only if they are engaged in a Business or Business Activity in the UAE, either directly or through an Unincorporated Partnership or sole proprietorship

• It has a fixed or permanent place in the UAE through which the business of the foreign person is carried on; or
• There is a Person who has and habitually exercises an authority to conduct business in the UAE on behalf of the foreign juridical person

• the income is derived from a UAE resident;
• the income derived is attributed to a Permanent Establishment in the UAE of a non-UAE resident; or
• the income is derived from activities performed, assets located, capital invested, rights used or services performed or benefited from in the UAE.

Accounting will enable you to make proper and defined decision

• It will ensure you adhere to statutory compliance
• It will provide adequate information to you with regards your business.
• It will enable you to asses or evaluate the performance of your business

Accounting will enable you to make proper and defined decision

• It will ensure you adhere to statutory compliance
• It will provide adequate information to you with regards your business.
• It will enable you to asses or evaluate the performance of your business

• You need to identify revenue streams to maintain accounting accuracy
• You need to keep a track of invoices and receipts
• Preparing tax returns is a good way to avoid penalties
• You should always keep an eye on the deductible expenses

• Mixing a personal account with the professional account of the company is the most common mistake that people make in accounting.
• Lack of communication between the accountant and the company is another common mistake made by people
• Not having a backup, misallocating resources are some of the mistakes that should be avoided in accounting.
• Performing manual accounting should be avoided
• Some people don’t keep the accounting books up to date which is a mistake that should be avoided.

• Cash Basis Accounting: cash basis accounting, you will have to record transactions only when you physically make or receive any payment.
• Accrual Accounting: accrual accounting, you will have to record every transaction that takes place, even when you don’t receive or pay money physically. Accrual is useful if provide credit to customers.

• Accounting is related to assets, liabilities, and capital

Assets = Liabilities + Owners Equity

• Financial accounting: Report based on business transactions
• Administrative accounting: Focus on the Administrative aspect
• Tax accounting: Relate to preparing and filing tax report
• Cost accounting: Doing detail analysis of unit cost of production and sales
• Management accounting: Focus on business operations.

• A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000
• Furthermore, a business may choose to register for VAT voluntarily if its supplies and imports are less than the mandatory registration threshold, but exceed the voluntary registration threshold of AED 187,500
• Similarly, a business may register voluntarily if its expenses exceed the voluntary registration threshold. This latter opportunity to register voluntarily is designed to enable start-up businesses with no turnover to register for VAT.

• Exports of goods and services to outside the GCC.
• International and intra-GCC transport
• Supplies for certain sea, air, and land means of transportation (such as aircraft and ships).
• Supply of precious metals for investment (gold, silver, and platinum)
• Newly constructed residential properties that are supplied for the first time within three years of their construction.
• Supply of certain educational services and relevant goods and services.
• Supply of certain healthcare services and associated goods and services.
• Certain eatables (a standard list will be ratified across the GCC by the Financial and Economic Cooperation Committee)
• The oil sector and the oil and gas derivatives sector (at the discretion of each member state)Additionally, each member state can zero rate or VAT-exempt:
• The educational sector
• The medical sector
• The real estate sector on residential building
• The local transport sector